Cherkizovo takes another step towards import substitution with opening of new replacement chick facility

February 3, 2017

Moscow, Russia – February 3, 2017 – Cherkizovo Group (LSE: CHE; MOEX: GCHE), the largest vertically integrated meat and feed producer in Russia, has launched its first replacement chick site at the new poultry production facility in the Lipetsk region. This marks a key step towards import substitution, which will help the Group to ultimately achieve 90% self-sufficiency in hatching eggs.

This facility is part of the Group’s full scale poultry production project in the Lipetsk region, into which the Company has invested close to RUB 3 billion rubles to date. The modern, state-of-the-art equipment at the facility, which adheres to the highest sanitary and biosafety standards, makes the Lipetsk site a potential candidate for export certification in the future. One replacement chick site will produce up to 222 thousand chicks. In 2017, the Company’s total stock is expected to reach 2,040 thousand chicks.

Cherkizovo Group has been producing poultry meat in the Lipetsk region for over ten years and has full control over the entire production chain. The Group has constructed a number of broiler sites, including ‘Novonikolskaya’, one of the biggest in its portfolio, and has also commissioned the largest hatchery in Europe with an annual capacity of 220 million eggs.

The Group launched the first parent stock cluster at Lipetsk in 2016 and there are currently three more parent stock sites at near-completion stage. The entire project, consisting of two replacement chick sites and four parent stock sites, will be fully completed in 2017. Once finished, the Group’s production capacity will reach 64 million hatching eggs per year, making it 90% self-sufficient in hatching eggs.